Pontiac teachers sue district, facing health insurance cuts

Teachers in the struggling Pontiac School District are suing the district after being told their healthcare coverage could get axed.

The teachers who filed the lawsuit are claiming school officials took money designated for their healthcare premiums, and transferred it to the general fund in order to make the district’s finances look better.

In fact, Michael Lee, attorney for the Pontiac Education Association, alleged in an Oakland County Circuit lawsuit filed this week that the reason school officials were putting the money into the general fund was to try and deceive Michigan officials as to the status of the state-approved plan to reduce the district’s deficit of $37.7 million.

"They have been taking money out of our checks and they haven’t been paying MESSA (Michigan Education Special Services Association)," said Aimee McKeever, president of the PEA.

As a result, the insurance carrier canceled coverage effective July 31.

So if left unresolved, the district’s teachers and their families would lose coverage by the end of the month.

School officials have yet to respond to the lawsuit.

The Pontiac district has been no stranger to financial woes. As we reported earlier this month, a six-member team was chosen by Gov. Rick Snyder to review the district’s finances.

An emergency manager could be appointed to oversee the district and its $38-million budget deficit.

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Gov. Rick Snyder has named six people to review the finances of the Pontiac School District, a step that could lead to the appointment of an emergency manager or other measures for the Oakland County district struggling with a $38 million budget deficit.

A three-member Local Emergency Financial Assistance Loan Board on June 6 found "probable financial stress" in the district.

Under the new emergency manager law, if a financial emergency is found to exist, Pontiac officials have four options. They can enter a consent agreement with the state, agree to an emergency manager, go through a neutral evaluation process, or choose bankruptcy.

The Detroit News asked Pontiac Emergency Manager Lou Schimmel if the city could go bankrupt after he leaves.

Schimmel said that won't happen if they follow his plan:

Pontiac is into its third emergency manager, Louis Schimmel, who is scheduled to leave his job this month but first will present a two-year plan to avoid bankruptcy to citizens at a meeting at 9 a.m. at City Hall.

Michigan’s teen unemployment rate is more than double the state’s overall jobless rate.

State and local officials say limits on federal grants intended to promote youth employment are partly to blame.

State labor officials say a quarter of Michigan teens who want a job can’t find one this summer. And they say part of the problem is the number of requirements on youth employment programs that are funded with federal grants.

The district could be forced to shut down operations before the end of its school year.

A letter sent this week by state Superintendent Mike Flanagan warns Pontiac schools the district won’t be able to make its Friday, May 17, payroll.

It’s been almost a week since the tiny Buena Vista school district in Saginaw County abruptly closed its doors.

There is still no plan to get the roughly 400 displaced students into classrooms for the balance of the school year.

Governor Rick Snyder says a financial bailout by the state is very unlikely.

“Well, I hope there’s solutions that could be short of that, and that’s what we’re having discussions on, the community coming together, other districts working with the state, all of us coming together to say, let’s solve this problem.”

Buena Vista ran out of cash because the state is withholding payments to make up for a grant the district should not have received.

The district’s finances and academic performance were already in poor shape. Buena Vista and Pontiac are both on the state’s “watch” list.